In the context of supporting pro-poor policy analysis and formulation there is need to generate improved ex-ante and ex-post understanding of the distributional effects of policy interventions affecting the livestock sector and small holder livestock producers. For this purpose, different combinations of empirical models are needed and complementing micro-simulation with national and regional economic (CGE) models is of great current interest. In close collaboration with the Department of Agricultural Research and Economics of the University of Berkeley, the Pro-Poor Livestock Policy Initiative (PPLPI) is advancing research on the detailed assessment of impacts of national and sectoral policies on small holder livestock producers. The approach, termed “Integrated Poverty Assessment of Livestock Promotion” (IPALP), links national or sub-national CGE models with multi-market and household specifications and is being implemented in selected focus countries.

IPALP covers four component areas of economic assessment: (a) analysis of initial macro-economic conditions; (b) micro-economic analysis of initial conditions; (c) dynamic simulation of policies and external economic conditions (e.g. development strategies, trade policy, WTO accession, market reform, tax policies, etc.); and (d) micro-economic assessment of policies, in concert with national and international policies and market forces, to identify patterns of local economic adjustment and their implications for poverty alleviation. The methodology is now at a fairly advanced stage of development and is documented in a Technical Reference Handbook.

While it is widely acknowledged that CGE models are extremely useful to shed light on detailed structural economic relationships and interactions, their practical implementation generally requires a high level of technical capacity. For this reason, analysis of this kind is rarely assimilated into local policy institutions, and the scope of application for these methods is thereby restricted. To overcome this barrier to capacity development, PPLPI plans to encapsulate the CGE model into a user interface accessible to policy researchers, who may not possess extensive econometric or programming experience.